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As student loans are relatively easy to come by, both from the government and from private lenders increasingly getting into the game, universities have been able to keep hiking tuition without seeing a drop in enrollment. Students are still advised that student debt is “good debt,” as noted above, and that they will be able to pay it off—but the costs are rising far more rapidly than average incomes.
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<p>The federal government has figured out for us the MAXIMUM amount they think most students should be able to handle over four years: $22k, the amount of subsidized Stafford loans.</p>
<p>Anything over that gets significantly riskier.</p>
<p>[Degrees</a> of Debt ? Features ? Utne Reader](<a href=“Degrees of Debt – Utne”>Degrees of Debt – Utne)</p>
<p>Yes, the federal government has figured it out for us, lol.</p>
<p>Re: post #3:
Seems odd to link a 6 page article from an alternative newspaper known to post (in their own words) provocative articles with none of your own comment or summary. For those of us who don’t have time to read a 6 pg article, what does it say?</p>
<p>"Yes, the federal government has figured it out for us, lol.'</p>
<p>Yes, they have, and done a very excellent job of it, too.</p>
<h1>5, if six pages is too long, try the paper edition - that is only 4.</h1>
<p>It is related to the subject of this thread, which should be obvious from the article title.</p>
<p>So summarize it please. Posting a link with no explanation is of limited utility. Most posters, when posting a long, or even not so long article, summarize or quote the relevant part that they feel is important to the discussion. </p>
<p>Dont think there is any paper edition around here, and not going to kill trees to print it.</p>
<p>jym, since you’re already familiar with the history and provisions of student loans and the rise in higher ed costs, skip the first few pages. I think the article does hit the nail on the head in this excerpt from page 4:</p>
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<p>I always wonder what’s the real mission of a school is when they’re seeking to increase their enrollment but are unable to graduate even half of their students within 5 years.</p>
<p>Thanks, sk8rmom. Very helpful. This , too, seems to be at the crux of the issue, and speaks to why loan forgiveness for certain types of positions (eg 10 years of public service) is being kicked around.
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<p>Public Service Loan Forgiveness has been around for a few years now, but requires the student to have made 120 payments after 10/07 on their federal direct loans (one can consolidate other federal loans made through Perkins/FFEL programs) and, obviously, to have been employed by an eligible organization. Standard loan repayment on federal loans is…you guessed it, 10 years. So, it seems to be that the only people who will benefit are those who qualify for IBR/ICR. And, since the first batch of PSLF-eligible applicants can’t even meet eligibility standards until October 2017, it remains to be seen how many can loans are actually forgiven. I think this is going to be a nightmare of bureaucracy…much like so many other “good ideas” the feds have come up with but failed to achieve practical implementation standards on. PSLF does not address private loans at all which, unfortunately, is often what pushes students over the edge of the debt cliff.</p>
<p>Sk8rmom,
My comment about loan forgiveness, etc was in reference to some “solutions” posed in the OP’s article
Car loans aren’t forgiven-- the cars are reposessed. How does one reposess an education?</p>
<p>If student loans become dischargeable through bankruptcy, my fear is that credit for students will become impossible to get. Students, on the face of it, are pretty poor credit risks because they tend to be young and lack income and assets. As jym626 points out, a degree isn’t collateral. No bank would lend students money without a co-signer (probably parents). So kids from poor backgrounds, kids without wealthy families, etc. will be even more shut out of educational opportunity. </p>
<p>I also balk at the idea that people in “public service” should get loan forgiveness and others shouldn’t. Who decides what public service is? It seems like a very political concept and privileges and exceptions shouldn’t be allocated that way. I don’t believe that everyone who draws a salary from the government is doing more “public service” than, say, a nurse or a parochial system schoolteacher.</p>
<p>Does this sound like “good debt”:</p>
<p>[n+1:</a> Bad Education](<a href=“http://nplusonemag.com/bad-education]n+1:”>http://nplusonemag.com/bad-education)</p>
<p>Education debt as “good debt” is the biggest bunch of BS that is propagated by none other than the banking industry. Suze Orman, who constantly plugs education debt as good debt and the virtues of credit scores, is nothing more than a dimwitted talking mouthpiece for the banking industry. </p>
<p>You want to know which type of debt is good debt? I’ll tell you: it’s no debt.</p>
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<p>If students are allowed to discharge educational debt, banks would then start doing what they should have been doing all along–making good loans. Once banks tighten credit the overrated and overpriced products that universities put out on the market will be exposed big time. The college tuition bubble has been inflated beyond belief because of easy access to credit and the fact that student loan debt is nondischargable. </p>
<p>Let’s also not forget why student loan debt was made non-forgivable in the first place–because of millions upon millions of dollars in lobbying efforts made by the banking industry during Bush’s presidency.</p>
<p>If student loans are to be unforgivable, then the “risk” associated with making these loans goes down to almost nothing. Banks should not be allowed to charge a particularly large amount of interest on loans where there is no risk of default involved. this is problem number one with the paradigm, not to mention the fact that banks need not expend any resources to ensure they are making a good loan. It is an incredibly cheap loan to make and it ought to be charged at a significant discount, not the way it is charged with a significant raise in the interest rates vis-s-vis a house or car loan. </p>
<p>But, the main thing nobody talks about is the amazing “future” economic costs of this debt to our entire economy. If every single educated new consumer graduates in this much debt, there are no new consumers to drive our consumer driven economy. It is a massive siphoning off of future economic growth into the pockets of the college administrators. It has a very large long term effect on economic growth.</p>
<p>we need to invest in our youth in this country and not just in those who are retired. Low cost affordable education is the single best way for us to do this, imho.</p>
<p>Students should pay back their student loans. There is no basis upon which not to, other than foolish decisions. Let those private citizens who are in favor of discharge, charitably help pay them off. Gravenworld…? :)</p>
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<p>Didn’t I read that the average loan debt is about $25K? And that is for students who have debt. Lets not blow this out of proportion.</p>
<p>Yes. And the average undergraduate currently enrolled in the U.S. is 24.8 years old.</p>
<p>I don’t think it is blowing it out of proportion to say that in an economy where a tremendously large number of graduates are already significantly behind the earning curve, having not been able to attain significant employment, where the number of earners for each retired person is going down, not up, that encumbering these same consumers with this kind of debt upon graduation is a drain on our economic growth. Not at all. It is. Let’s not burry our head in the sand and pretend it does not matter.</p>